Scotiabank to record C$275 mln 2nd-quarter restructuring charge

Mon May 2, 2016 10:25am EDT
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TORONTO May 2 (Reuters) - Bank of Nova Scotia will book a second-quarter restructuring charge of about C$275 million ($219.33 million) as part of its effort to improve productivity and drive "digital transformation", Canada's third-biggest lender said on Monday.

The bank, which operates under the Scotiabank banner, said in October it was cutting an undisclosed number of jobs as part of a cost-reduction strategy. It cited technology changes as one reason.

The lender, which is expected to report its fiscal second-quarter results on May 31, said the charge will equate to about 22 Canadian cents a share.

In a research note, CIBC analyst Robert Sedran suggested there could be more such charges to come.

"Given the underlying trends and the need to deal with legacy systems and processes that will preoccupy bank management for the next several years, this type of charge has a run-rate feel to it," he said.

Bank of Nova Scotia shares were down 0.7 percent at C$65.31 in early trading in Toronto. Other major Canadian bank shares were also lower on Monday.

Banks have been looking to cut costs and drive technology changes as customers increasingly move away from brick-and-mortar branches to online transactions.

($1 = 1.2538 Canadian dollars) (Reporting by John Tilak; Editing by James Dalgleish)